Intel received a contract for the production of military chips from the Pentagon for $3.5 billion

In mid-September 2024, Intel received a $3.5 billion federal grant to produce semiconductors for the Pentagon.

During a secret program called Secure Enclave, the production of advanced chips for military and intelligence applications will be established. The program covers several states, including a major manufacturing site in Arizona.

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The state contract was in addition to the promised $8.5 billion in grants and $11 billion in loans that Intel should receive under the Microconductors and Scientific Discovery Act, which President Joe Biden signed in 2022 to revive semiconductor production in the United States and reduce dependence on Asia.

Intel is still negotiating the terms of these grants, which are designed to support businesses in Arizona, Ohio, New Mexico and Oregon. So far, Intel has not received the money. Funding for the Secure Enclave program must come from the same grant program administered by the Commerce Department, but that contract was awarded bypassing the standard application process.

The Secure Enclave agreement shows that the U.S. government still trusts Intel when it comes to Pentagon plans, despite the company's problems. In August 2024, Intel released a crushing earnings report that led to a major drop in the company's stock. It is known that the company is actively revising its production plans, but is likely to postpone or stop the implementation of a number of projects outside the United States so as not to touch the flagship sites in Arizona and Ohio. It is they who will be engaged in the production of new chips for the Pentagon, as soon as the latest details are settled, and the company will receive the expected funding.^[1]

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